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Don’t expect much more upside for Wells Fargo , according to Morgan Stanley. Analyst Betsy Graseck downgraded Wells to equal weight from overweight. Her price target of $95, up from $87, implies a gain of just 2.3% from Friday’s close. With the removal of Wells Fargo’s asset cap after seven years , catalysts for the stock are now scarce, she said. “We were OW Wells heading into the asset cap removal, viewing it as an underappreciated catalyst for faster EPS growth,” the analyst said in a note to clients. Now, “we see more limited upside from here relative to our OW rated stocks.” “We see the next meaningful catalyst event when the company will provide FY26 guidance in January, and we expect them to raise their ROTCE target from the current ~15%, but we think the market is also already largely there,” the analyst wrote. ROTCE refers to return on tangible common equity, a profitability gauge used by banks. WFC YTD mountain WFC year to date Graseck also said Wells Fargo won’t benefit from the latest rate-cutting cycle at the Federal Reserve. The central bank earlier this month lowered its benchmark rate by a quarter-percentage point. Traders are also pricing in two more rate cuts before year-end, per the CME Group’s FedWatch tool. “We see Wells’ NII as vulnerable in the coming rate-cutting cycle. We forecast [net interest margin] contraction through YE26. … As a result, our [net interest income] estimates are now 1.5% below consensus for 2026 and 2.5% below for 2027,” said Graseck. Wells Fargo shares, which are up 21% year to date, fell slightly in the premarket. Analysts are mostly bullish on Wells Fargo despite Morgan Stanley’s downgrade. Of the 26 who cover the stock, 17 rate it a buy or strong buy, LSEG data shows. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
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